The Life Insurance Statistics That Will (Literally) Change Your Life

March 24, 2020

You’ve probably heard this claim before…

Eat this ONE superfood to live decades longer!

Do this ONE thing to make millions overnight!

“Life-changing” advice is everywhere these days, so it’s no surprise that many readers are skeptical of headlines like these.

But we do not promise get-rich-quick schemes or healthy superfoods. Instead, we have just one harrowing statistic you might want to hear:

One in three life insurance policies goes unclaimed.

In the United States, there are 75 million families with about $4 trillion dollars in life insurance policy coverage. You and your family may be among them. But of these 75 million, a whopping 25 MILLION of them will never claim their policies – which means they are missing out on about $1.4 trillion in coverage!

Why is this happening? The answer is simple: a lack of communication. When a policyholder passes away or is otherwise incapacitated, he or she cannot communicate with loved ones about their life insurance. In fact, the policy holder’s family may not know they have life insurance at all! If you want to ensure that your family is covered after an accident, you and your loved ones must discuss your life insurance policy.

Life Insurance By the Numbers

It’s never easy for family members to discuss end-of-life plans. Whether you’re discussing the possibility of a workplace accident or simply adjusting a loved one’s will, this conversation can be fraught with uncomfortable emotions – which is why so many people avoid it.

Planning for these incidences is the best way to ensure that your family is cared for after you’re unable to provide for them. Life insurance policies, investment accounts, retirement funds, and more can be hugely helpful to your surviving beneficiaries. However, these forms of assistance are only useful when your loved ones know that they exist.

In addition to the $1.4 trillion in unclaimed life insurance payouts, American families also leave behind billions in abandoned investment accounts, unpaid wages, and retirement funds. Unfortunately, most of these accounts are unclaimed for one simple reason: the beneficiaries didn’t know they were there. Policies and investments might be sitting in a filing cabinet, locked in a safe, or even stored online, out of sight and out of mind.

Don’t Let Your Family Be a Life Insurance Statistic

You probably set up your life insurance policy to protect your family members from financial hardship and stress if anything happened to you. So, how do you prevent your life insurance policy from going unclaimed? Here are a few simple tips that can help you make sure your loved ones are covered after an incident:

Tip 1: Think Like Your Beneficiary

Simply storing your policy in a cabinet or safe doesn’t guarantee that your loved ones will claim it (if so, we wouldn’t see that one-in-three statistic). Your loved ones may not know how to access your files – or they may not even remember where you kept them.

To avoid this problem, build your contingency plan around your beneficiaries. Talk with your family about your insurance policy and work together to store all paperwork in a place they will remember to look. This will ensure that everyone knows about your life insurance policy and that they will be able to access any documents they need in an emergency.

Tip 2: Keep Multiple Copies

Even if your family works together to find the ideal storage space for your life insurance, there’s still a chance that your policy could be lost. It may be moved accidentally, or simply forgotten about over time. The emotional stress of losing a loved one can make remembering storage spaces even more difficult, which is why it’s always wise to have a backup.

These days, technology makes it easier than ever to store backup copies of all your important files. Digital files can be easily accessed on your phone or other electronic devices, which means your beneficiaries always have a copy of your policy right in their pocket!

How many copies of your policy should you make? We suggest three: one hard copy in your home (ideally in a safe or filing system), one digital backup, and one copy with a wealth manager, financial advisor, or estate planner. These three copies will ensure that one way or another, your family is always able to access your policy information.

Tip 3: Safety First

When you build your life insurance contingency plan, it is essential that you consider every possibility. After all, your policy won’t do your family any good if it’s destroyed in a fire or flood! Make sure you take the necessary steps to ensure your policy information is kept safe until it’s needed.

Safety steps will vary based on how and where you’ve stored your information. If you prefer hard copies for your files, make sure you have a digital backup online or stored on your computer hard drive. This will ensure that your family still has access to your documents even if the hard copy is destroyed or damaged.

If you primarily store documents or account information online, make sure your information is protected from hackers. Store virtual roadmaps to your accounts (for example, your policy carrier, number, and agent contact info) so your loved ones can access the information on their own – but only offer the minimum information so you aren’t vulnerable to cybercrime.

Finally, the most important safety step you can take is communicating with your family about your policies, investments, and any other account information. If necessary, write down the essential information for them to reference later (but again, make sure this information is secure). If you want your family to benefit from your life insurance, retirement plan, or any other form of assistance when you cannot provide for them, communication is key!

Try LifeExec To Store Your Insurance

Creating a legacy plan can be an overwhelming process – which might be why so many Americans fail to communicate their plans to their loved ones. At LifeExec, we can help make this process simple and convenient.

We offer over 20 forms and checklists that will help you manage a will or trust, insurance policy, digital accounts, and much more. Our patent-pending, event-based communication plan even disseminates your documents and instructions to your family during serious events, ensuring that everyone has the information they need during this difficult time.

With LifeExec, you can have peace of mind knowing that your loved ones will be cared for – no matter what may happen. Sign up for our free 30-day trial today, and you can download our digital accounts, memberships, and subscriptions forms absolutely free!

Free Gift for You

LifeExec is a community of people helping people. We work with amazing estate planners, wealth managers, insurance agents, medical professionals, first responders, and real life people that have lived through difficult real life situations. We use this collective wisdom and produce useful tools and resources for you to use while building your life plans.

Download our LifeExec Legacy Document Checklist and LifeExec Insurance Policies forms and use them to help ensure your loved ones have important information they need during a legacy event.

Please feel free to share them with anyone in your life they may help.

You might also like